An Undisputed Legacy - Ensuring Your Wealth Is Passed On Unhindered

• Published date: 15 August 2022
• Subject Matter: Family and Matrimonial, Wills/ Intestacy/ Estate Planning
• Law Firm: Forsters
• Author: Fiona Smith and Roberta Harvey

Any individual fortunate enough to have generated wealth, or to have been a custodian of family wealth, during their lifetime should plan for how it will be dealt with after their death.

In this paper, we consider nine key steps individuals can take to help ensure that their estates pass to the next generation without disputes or litigation.

A smooth generational transfer of wealth is taken for granted by most, but statistics from the Ministry of Justice show that this might not be the case. Over the past ten years, more than 2,300 will disputes have been heard by the High Court. Many thousands more didn't end up in court but did destroy numerous family relationships and incur a great deal of costs before being settled.

BEFORE YOU MAKE YOUR WILL

Undertake a capacity assessment to avoid disputes

A capacity assessment is undertaken and a report prepared by a medical practitioner, either a GP or a psychiatrist. The report can be used to show that the testator had mental capacity when instructions were given for the will to be prepared/the will was executed.

If the testator is particularly elderly, vulnerable, unwell, or is making significant changes to their will it is possible that the will could be challenged post death on the grounds of lack of capacity. A capacity assessment and report should make it more difficult for the will to be challenged on these grounds.

It is important to note that the instructions to the GP/psychiatrist must explain why the assessment/report is required and set out the rule in the case of Banks v Goodfellow.

Prepare your family members in advance if you have unusual plans for your wealth

Most family members expect wealth to be primarily kept within the family. If this is not how you intend to structure your estate, it is advisable to inform your family of your intentions, however difficult this might seem.

Avoid accidentally 'creating' dependants - this can lead to litigation

Another key argument individuals may use to challenge a will is that they were financially dependent on the deceased, and that they have not been properly provided for by your will/under the intestacy rules. It may be surprising to learn that you can 'create' a relationship of dependency accidentally, by establishing a regular and long-term pattern of making gifts. If you wish to give money to someone - a child or a grandchild perhaps - it is better to do so in a single lump sum, as this cannot create a relationship of dependency, making it far more...